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Union Budget 2026: What Vidarbha Could Gain from India’s New Fiscal Roadmap

Union Budget 2026: What Vidarbha Could Gain from India’s New Fiscal Roadmap
Union Budget 2026: What Vidarbha Could Gain from India’s New Fiscal Roadmap

The stage is set for the Finance Ministry’s presentation of the Union Budget 2026, and early indications point to another big push on infrastructure.


Finance Minister Nirmala Sitharaman has set a capital expenditure target of over ₹11 lakh crore for the current fiscal, underscoring New Delhi’s commitment to public works as the engine of growth.


Government data shows this strategy is already bearing fruit. In the last few years, India operationalised 88 new airports, laid 31,000 km of rail lines, expanded metro networks fourfold, and boosted highway length by 60%. To maintain this momentum, the upcoming budget is expected to continue generous funding for highways, railways, urban infrastructure and logistics.


Officials are also working to ensure these funds are fully utilised after a nearly ₹93,000 crore capex shortfall last year, including convening high-level meetings with banks to smooth financing for projects in roads, power, and housing.


Such measures signal that the government is determined not to let bottlenecks derail its infrastructure agenda.


This focus on infrastructure dovetails with the broader fiscal roadmap. Even as spending rises, the Centre is keen on gradual fiscal consolidation. The government has reiterated its pledge to rein in the fiscal deficit to around 4.5% of GDP by 2025-26. Analysts expect the Budget will set a deficit target near that mark, balancing prudence with the need for growth-oriented outlays. “For FY2026, we anticipate a gradual pace of fiscal consolidation…allowing the government to focus on capex spending and targeted social sector expenditure,” noted Morgan Stanley economists in a recent outlook.


In practice, this means the Budget will likely prioritise high-impact spending (like infrastructure and defence) while keeping an eye on debt levels. The continuity of the 50-year interest-free loan scheme for states has been a key part of this strategy. Sitharaman recently highlighted that ₹3.6 lakh crore has been disbursed under this scheme over the past four years, spurring a more than 10% rise in state capital investment.


We can expect this program, which funds state infrastructure projects at zero interest, to be extended or expanded, given its popularity. Maharashtra’s Devendra Fadnavis, who hails from Vidarbha's Nagpur, for instance, welcomed the scheme’s extension last year, calling Maharashtra a major beneficiary of these long-term funds. By empowering states to build assets without straining their own budgets, the Centre is effectively broadening the development footprint.


Social Welfare and Growth Outlook


Beyond bricks-and-mortar, Union Budget 2026 is expected to reinforce the social safety net and nurture human capital, an equally crucial part of the fiscal roadmap.


Finance Ministry officials have signalled that social welfare spending will see steady increases, though without large-scale populist giveaways.

Key programmes in health, education, and rural development are likely to get modest boosts to account for inflation and expanded coverage. In recent years, overall social sector expenditure by the government has risen from ₹14.8 lakh crore in FY21 to nearly ₹25.7 lakh crore in FY25, reflecting the push toward inclusive growth. Yet some experts note that as a percentage of total spending, social sectors still deserve more attention.


The coming budget may answer these concerns by allocating additional funds for schemes like rural employment (MGNREGA), subsidised food, and farmer support, especially as India’s economy navigates uneven post-pandemic recovery.


There is also talk of targeted measures such as higher outlays for child nutrition and health missions, aligning with the government’s goal of reducing poverty and improving human development indices.


Importantly, any welfare measures will be framed within an ambitious growth outlook. The Finance Ministry has projected that India needs to sustain around 8% annual GDP growth over the next decade to achieve developed-nation status by 2047. In line with that target, Budget 2026 is expected to set a robust growth projection for the coming year and introduce policies to bolster both demand and investment.


The government is reportedly considering further steps to stimulate domestic demand, having already provided income tax cuts in the previous budget and seen the central bank ease interest rates.


Rising disposable incomes, thanks to measures like last year’s tax exemption increase to ₹12 lakh of annual income, are intended to boost consumer spending. At the same time, the Budget could unveil incentives for private investment in sectors ranging from manufacturing to renewable energy, as well as initiatives for skill development to ensure India’s workforce can drive future growth.


All these moves feed into the growth targets the government has in mind, internal estimates peg GDP expansion at around 6.5%–7% for the current fiscal and aim higher next year, barring external shocks.


Policymakers acknowledge global headwinds like trade tensions and oil prices, but the overall tone is one of cautious optimism.

The Budget will likely marry social welfare with pro-growth reforms, a combination meant to secure what the Finance Ministry calls “inclusive development” even as India strives to remain the world’s fastest-growing major economy.


States’ Share and the Vidarbha Focus


A crucial aspect of the Union Budget 2026 will be how it allocates resources to states and addresses regional disparities. This year’s budget arrives at a transitional moment for centre-state fiscal relations.


The Sixteenth Finance Commission has been deliberating on a new revenue-sharing formula to apply from April 2026.

While its recommendations are yet to be revealed, the Union budget is expected to maintain support for states through special grants and schemes in the interim. The continuation of the 50-year interest-free capital loan to states, as noted earlier, is one such measure.


By providing no-cost funds for projects ranging from highways to rural infrastructure, the Centre effectively boosts states’ spending power without altering formal devolution ratios. It’s no surprise, then, that state leaders closely watch the fine print of these schemes.


Maharashtra, for instance, has a large pipeline of projects and will look to leverage central funds wherever possible. Last year’s Union budget earmarked specific allocations for the state, including ₹683 crore for rural roads and ₹186 crore for lift irrigation, alongside big-ticket support for metros and railways. Yet within Maharashtra, there remains a sense that some regions are still awaiting their due.


One such region is Vidarbha, in the state’s east, which has historically lagged in development.


Vidarbha comprises Nagpur, Amravati and surrounding districts, and local stakeholders are hoping this budget will finally deliver a meaningful boost.


In the 2025 budget, Vidarbha was largely overlooked, receiving only a ₹295 crore central grant for Nagpur’s river rejuvenation project, while big infrastructure in other regions got far more.

“Except for the Nag river project, there is hardly anything for Vidarbha,” budget analyst Julfesh Shah remarked of last year’s allocations, noting that the region continues to fall behind in industrial and infrastructural development. The upcoming budget is an opportunity to change that narrative.


Analysts estimate Vidarbha could receive on the order of several hundred crores in new grants if the Centre is serious about addressing its project backlog. In mid-2024, the government had announced a ₹600 crore package for irrigation in Vidarbha and Marathwada (later revised to ₹400 crore), but those funds never fully materialised.


A similar or larger allocation could be revived this year to tackle the region’s agrarian distress. Indeed, with drought-prone districts and a history of farmer suicides, Vidarbha’s need for irrigation and water conservation investment is pressing. Long-pending schemes like the Gosikhurd dam on the Wainganga River, which has been under construction for over 30 years, illustrate both the challenge and the opportunity.


The Gosikhurd National Irrigation Project, aimed at watering 250,000+ hectares in eastern Maharashtra, has repeatedly missed deadlines despite substantial funding. The state government recently extended its completion target to June 2026. A dedicated push from the Union budget in the form of final-mile funding or oversight could ensure this project is finished, bringing relief to farmers in Nagpur, Wardha and Bhandara districts.


Another transformative project on the horizon is the Wainganga-Nalganga river-linking initiative, which would benefit several Vidarbha districts. With an estimated cost of ₹88,574 crore, this project aims to irrigate over 3.7 lakh hectares across Nagpur, Wardha, Amravati, and neighbouring areas by diverting surplus water to deficit regions. It has received in-principle clearance, but implementation has been slow.


Local advocates are keen to see the Centre commit seed funding in the budget to kickstart construction on this ambitious scheme. “It’s hard to understand why this project hasn’t moved forward when the benefits are so obvious,” activist Avinash Kale said recently, pointing out that it could generate ₹12,000 crore in annual revenue through improved agriculture and water supply.


Even a token allocation in 2026 could signal the government’s intent to prioritise Vidarbha’s water security. Beyond irrigation, the region’s development wishlist includes industrial and connectivity projects that have long been promised.


A prime example is the proposed petroleum refinery and petrochemical complex in Vidarbha, which has been floated to catalyse industrial investment. Maharashtra officials, including then-CM Fadnavis, even lobbied the Union Petroleum Ministry to set up a refinery here.


Thus far, it hasn’t found a place in the central plans, something that could change if the budget announces a feasibility study or special economic package for it. “The establishment of a petroleum complex and refinery would create thousands of jobs…and significantly contribute to Vidarbha’s economy, yet the Centre has not taken any concrete steps in this direction,” notes Nitin Ronghe, convener of a regional forum pressing for such projects.


His frustration echoes a broader sentiment that Vidarbha deserves big-ticket investments on par with other states or regions.


Transport connectivity is another area to watch. Nagpur, the largest city in Vidarbha, has seen rapid development as a logistics hub, but intra-region connectivity lags.


The Nagpur Metro expansion (Phase II), for instance, is underway with state support but awaits substantial central funding. Last year’s budget allocated nothing to Nagpur Metro’s extension, even as metros in Mumbai and Pune received hundreds of crores.


This time, a central allocation for Nagpur Metro’s second phase, which costs an estimated ₹6,700 crore, would signal the Centre’s commitment to urban growth in the heartland. Likewise, upgrading Amravati’s airport is a local priority that might get attention under UdeDeshKaAamNagrik (UDAN) regional connectivity funds.


Amravati (the second big city of Vidarbha) currently has only a small airstrip at Belora. The state has readied it for civilian flights by March 31, but it cannot handle large aircraft yet. Ronghe and others argue the Centre should step in with funding to develop a full-fledged airport there.


Given that air connectivity is vital for attracting industry, a budgetary provision for Amravati airport’s expansion or a viability gap subsidy for airlines would be welcomed. Highway projects in Vidarbha are already in motion thanks to state initiatives, such as the new 760 km Maharashtra Shaktipeeth Expressway from Wardha to the Konkan coast. While largely state-funded, such corridors could benefit from central facilitation (for example, Bharatmala inclusion or land acquisition support).


The same goes for the idea of a defence manufacturing corridor spanning Nagpur, Wardha, and Amravati, a proposal that, if taken up by the Union government, could bring investment and jobs.


From a political standpoint, there is renewed pressure to address Vidarbha’s needs. Local leaders note that Vidarbha delivered crucial votes in recent elections, and they caution against leaving the region behind. “Vidarbha played a crucial role in the ruling alliance’s success…yet the region was neglected in the Budget,” Shah observed pointedly last year. With Maharashtra’s own budget focusing heavily on Vidarbha’s development, from a Gadchiroli steel hub to agro-logistics facilities for farmers, the onus is now on the Centre to complement these efforts.


There are signs New Delhi is listening. Union Minister Nitin Gadkari, who hails from Nagpur, recently asserted that central allocations to the region have doubled in the past eight years and promised that Vidarbha remains a priority for infrastructure projects.

Stakeholders will be looking for those words to translate into concrete numbers and projects in Budget 2026. Whether it’s a fresh irrigation package, funding for a mega industrial park (such as the textile park already approved for Amravati), or new education and healthcare institutions, even relatively small steps could start to bridge the development gap. '


The budget’s announcements will thus be closely scrutinised in Nagpur and beyond, as a litmus test of the Centre’s intent to ensure balanced regional growth.


As the Finance Minister rises to present the Union Budget 2026, the country will be watching for more than just headline tax cuts or deficit figures.


This budget is poised to reveal how India’s leaders plan to steer the economy through a complex landscape, boosting growth and infrastructure at a record pace, while also spreading the gains to those regions that have waited longest. For Vidarbha and other underserved areas, it represents a chance at finally seeing long-promised projects take off and new opportunities emerge.


The true measure of success will be in the follow-through, turning budgetary allocations into shovels in the ground, factories humming, and benefits reaching the common citizen.


Anuradha Beniwal, a Nagpur-based economist, perhaps put it best: “What people here want is not special treatment, just a fair share.” This Union Budget will set the tone, and the expectations are sky-high that the fiscal roadmap unveiled will indeed lead to every state and every region, like Vidarbha, having a stake in India’s growth story.


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